Friday, Fannie Mae rolled-back one of its least popular mortgage guidelines updates of the last 12 months.
Effective March 1, 2009, real estate investors can once again own and finance up to 10 individual properties. The restriction reversal does come with new minimum requirements, however.
Homeowners buying a 5th, 6th, 7th, 8th, 9th or 10th home must meet the following standards, as set forth by Fannie Mae:
- 720 credit score
- 25% downpayment for a 1-unit (30% for a 2-4 unit)
- No mortgage delinquencies in the last 12 months
- 6 months of reserves for each investment property
In other words, Fannie Mae is re-opening the lending spigot for real estate investors with good credit, a sizeable downpayment and ample reserves.
According to Fannie Mae, the change rationale is that experienced investors can “play a key role in the housing recovery”. Until now, foreclosure auctions have gone at less than full speed because investors unable to pay cash have been halted by the existing 4-property Fannie Mae limit.
Going forward, expect a more expedient foreclosure liquidation nationwide which should, in turn, provide further support for the housing market.
And lastly, not to be forgotten, homeowners with more than 4 properties can finally participate in the ongoing conforming mortgage Refi Boom. Until now, they’ve been stymied by the 4-property restriction, too.
If you're new here, you may want to subscribe to my RSS feed.
Related posts:
- Fannie Mae Restricts 2-Unit Borrowing For the first time in nearly six months, Fannie...
- For The Second Month In A Row, Foreclosures Are Concentrated In 3 States For the second month in a row, the country's...
- What You Should Know When Buying A Short Sale or A Bank Owned Home (Part 3) This is the final part of this series. I will...
- Real Estate Investments: Some Words of Guidance "Most of the biggest real estate fortunes were not...
- Real Estate Marketing Everybody knows the famous statement “Who possesses information, possesses the...
Related posts brought to you by Yet Another Related Posts Plugin.
{ 1 trackback }
{ 1 comment… read it below or add one }
Good move by Fannie Mae, which should help reduce the inventory of short sales and foreclosed properties.